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Gloomy factory data shatters hopes of swift UK recovery

UK factory orders are declining at the fastest rate for 17 years, the CBI said on Wednesday as the industry association warned that the country faces a long, hard slog out of recession.

The CBI's measure of orders fell from -51 to -59, well below the anticipated reading of -45. The CBI said that despite price-cutting and the relative weakness of sterling, there was no pick-up in exports.

The export orders balance dropped to -45% from -34% in April, offering further proof that the benefit of the weaker pound is still being outweighed by a collapse in demand for goods from overseas markets.

Ian McCafferty, CBI chief economic adviser, said that the latest data reinforced the CBI’s belief that “the road out of recession will be long and slow".

The CBI also warned that about a quarter of a million jobs will be lost in manufacturing this year.

The survey contrasted with a more bullish outlook revealed by the latest minutes from the Bank of England's monetary policy committee on Wednesday which showed that members voted unanimously to retain rates at a record low of 0.5% and delay an expansion of the so-called “quantitative easing” plan.